GM’s New Chief Executive Wants to Put Hammer Down on Company Comeback

Mary T. Barra GM CEO
Mary T. Barra may be the first female chief executive in the auto industry, but she wants to keep the focus firmly on the vehicles.

In her first extended public comments since taking over the company helm on January 15, Ms. Barra stated that she wanted to accelerate the company comeback from bankruptcy with better brands, improved products, and “consistently profitable operations around the world.”

What about the recent GM recall? Certainly, the current recall news about faulty ignition switches in some of its models is already testing (and will continue to test) the company and its leadership. In February, GM recalled 1.6 million cars due to ignition switch issues that could turn off a car’s engine, disable its airbags and make steering difficult. The recall involves six models from years ranging from 2003 to 2007. The problem has been linked to 12 deaths, the company says. Understandably and to say the least, car owners are upset. 

Barra’s experience. Ms. Barra brings her experience as an engineer and a former plant manager to the table in her new role. She understands that even when a company is leading in a segment, it is only for a moment. The auto business is highly competitive, and GM must be continually raising the bar itself if it is going to succeed.

She has been with the company for 33 years, and has a low-key style that is in sharp contrast to that of her predecessor, Daniel F. Akerson, who was appointed to the board by the government. Mr. Akerson spent a lot of his time in charge of the corporation persuading the company to get rid of its conservative culture.

GM gets stronger. Now GM has a strong balance sheet, solid positions in North America and China, and an employee base that is energized by the federal government sale of the last of its company stock. The company’s market share remains at about 18 percent in the hard-fought American market. Sales in the U.S. increased by 7.3 percent, trailing the industry’s overall growth of 7.6 percent.

The international picture for the company is still unclear due to continued losses in its European division and stagnant profits in Asia. Ms. Barra is now shifting the strategy advocated by her predecessor, which included an emphasis on building the Cadillac luxury brand and leveraging the company’s global scale so that products can be sold worldwide.

She has set some ambitious goals for the company – to achieve a 10 percent pretax profit margin in North America by mid-decade and steer the European unit to a break-even point during the same period. To be successful, she will need to step up the pace of new products coming to market, such as the GMC Canyon midsize pickup and the Cadillac ATS coupe.

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